BUCKS; One Premise For Pay Bias

By TARA SIEGEL BERNARD

Published: August 4, 2012

The fact that women continue to earn less than men has been well documented. And while part of that pay gap can be explained away, there is still a significant piece that cannot.

But new research suggests that the wage gap may potentially be attributed, at least in some part, to the way women are perceived in the workplace: When a managers know they can blame the company's financial woes for their pay decisions, they are likely to give women smaller raises than their male counterparts. And that's because women may be seen as being more readily appeased by such excuses than men.

The findings, which came from an experiment conducted with 184 male and female managers with real-world experience who participated in a simulation, found that managers who worked about 13.5 years, which was the average for managers participating in the study, gave male employees 71 percent of money available for raises while they only allocated 29 percent of the funds to female employees. The results were even more pronounced among more experienced managers. (The study, ''Engendering Inequity? How Social Accounts Create versus Merely Explain Unfavorable Pay Outcomes for Women,'' was recently published in the journal Organization Science.)

''Whenever research reveals disparities between men's and women's pay, there is a common retort: The gap must be due to unobserved differences in men's and women's willingness or skill in negotiating pay,'' said Maura Belliveau, the study's author, an associate professor at LIU Post's College of Management. ''Although some gender differences in negotiation exist, this study reveals a major disadvantage women incur that precedes any negotiation.''

The study's participants acted as managers and had to determine an employee's raise. The managers were told that raise funds were limited because of financial difficulties that were not yet public. The only factor that differed among the employees was their gender; everything else - including their job, level of performance and amount of money available for raises - was identical.

When managers could not explain their decision, they gave equal raises to men and women. But when managers could provide an explanation, they paid women less than men -- but they also paid these women less than women in another situation where they could not provide them with an explanation for the raise amount. Raises given to men, meanwhile, were the same regardless of whether they could provide a reason or not. The results were consistent for both male and female managers.

By giving 71 percent of available raise money to men, Professor Belliveau pointed out that ''managers ensured that men did not need to negotiate to obtain a good raise.

''In contrast, managers' raise decisions put women who performed at the same level as men in a position where they would not only need to negotiate to obtain a reasonable raise, but they would have to do so from the starting point of a lowball amount,'' she added. ''That's an extremely challenging task, even for a skilled negotiator.''

Professor Belliveau also studied why women were given smaller raises when managers had a ready excuse to fall back on. And she said that since women are stereotyped as people who are more focused on ''process,'' the managers assumed women would feel that they were treated fairly when given an explanation. ''Having the opportunity to explain enables managers to think of themselves as treating women fairly from a process perspective,'' she said. ''So, paradoxically, managers who give women less pay can think that they are treating women well.''

But research shows that managers' perceptions about women aren't rooted in reality. Past research shows that both men and women value fair treatment equally, she said. But the current study found that managers' ideas about women's values ''loom larger than the objective reality, she added.

Data did not show that managers thought women would be more likely to believe the excuse, be more reasonable about pay constrains, or be less concerned about the size of their raises.

All of this obviously puts women in a tough position, which is why Professor Belliveau said that ''managers and human resource professionals need to closely monitor pay data in their organizations to ensure that the burden of low raises is not disproportionately placed on women.''

This is especially important now, she said, since many employers can easily use the current economy as an excuse for tightening the company's purse strings.

This is a more complete version of the story than the one that appeared in print.